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Mandalay Hotel bases its budgets on guest-days. The hotel's static budget for August appears below:
Budgeted number of guest-days 4,300
Budgeted variable costs:
Supplies (@$9.60 per guest-day) $ 41,280
Laundry (@$9.40 per guest-day) 40,420
Total variable cost 81,700
Budgeted fixed costs:
Wages and salaries 57,190
Occupancy costs 52,030
Total fixed cost 109,220
Total cost $ 190,920
1. The total fixed cost at the activity level of 5,500 guest-days per month should be ________?

Respuesta :

Answer:

$109,220

Explanation:

Mainly there are two types of cost i.e variable cost and the fixed cost. The variable cost is that cost which is change when the production level change whereas the fixed cost is that cost which remains constant whether production level changes or not  i.e $109,220

So, the variable cost includes indirect material, indirect labor, and factory supplies

And, the fixed cost includes supervision, taxes ,and depreciation expense.  

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